Peter Schiff’s response to distrusting the gold

User Contributed News – Recently, a MoneyWatch blogger named Larry Swedroe encourages investors to be wary of predictions connected to gold, having this position since 2009, during which period gold has many times outperformed stocks. The last post of Swedroe has prompted the response of the CEO of EuroPacific Precious Metals’ Peter Schiff in which he comments on Swedroe’s column.

Peter Schiff has commented that Swedroe links this thing to his forecast connected to gold rising above 5k/oz before the bull market end and Swedroe has modified his prediction to 2,300 dollars/ oz by the end of this year. Moreover, Schiff believes that gold will continue to rise in 2013.

In his column, Swedroe shares his opinion that forecasters cannot be trusted and he does not remember any forecasters who gave their clients advice to invest in gold in 2003, but Schiff claims that he was actually advising precisely at this very time. Furthermore, Schiff said that he had continued his bullish call because of the fundamentals which drive the market have become more pronounced.

Schiff said that his accurate predictions are due to his forecasts connected to the bubble in 1999 – 2000, the housing market collapse in 2006, the credit crunch in 2007 and the forthcoming US dollar and Treasuries flight. Moreover, Schiff believes that the period between 1980 & 2001 was a kind of anomaly as the world’s reserve currency was operated by the country. He thinks that of the 90s was paid for by economic malaise and was driven by easy money, adding that gold’s early rise was due to the inflation back then.

According to Schiff, there is a very good chance that inflation will not materialize, U.S. economy will get back on its fee, and that the Federal Reserve will end its policy.

Furthermore, Schiff is of the opinion that the Austrian School investors’ key advantage is understanding the distortions of policy and their influence on prices.

Peter Schiff shares that he examines an asset by considering its utility and how likely it is for it to be affected by recent government policies and anticipated events.